SHANGHAI: Tesla cut prices in China for the second time in less than three months on Friday, fuelling forecasts of a wider price war amid weaker demand in the world’s largest autos market.

The US automaker also cut prices on its best-selling Model Y and Model 3 electric vehicles in Japan, South Korea and Australia in what a person with direct knowledge of the plan said was part of an effort to help stoke demand for output from its Shanghai factory, its single largest production hub.

Tesla shares fell 4.5% in premarket trading after the first major move by Tesla since appointing its lead executive for China and Asia, Tom Zhu, to oversee global output and deliveries.

Automakers have long turned to incentives to control inventory, but, until late last year, Tesla had been able to keep prices steady or even raise them due to strong orders.

But last month CEO Elon Musk said “radical interest rate changes” had affected the affordability of all cars, new and used, and that Tesla could cut prices to sustain volume growth.